Havering Council Fails to Deliver £5M in Planned Savings, Raising Financial Stability Concerns

Havering Council has fallen short of its savings targets, delivering only £10.3 million of the planned £15.3 million in savings for the 2024/25 financial year, according to a report presented at the Overview & Scrutiny Board meeting on Thursday. Departments are being asked to contain spending within their assigned budgets to address this £5 million shortfall¹. The shortfall has raised concerns about the council's financial stability, especially as it relies on an £88 million capitalisation direction².

The Savings Progress Update report detailed the specific savings that were not achieved and the reasons behind the shortfalls. The largest single saving not achieved was a £0.420 million reduction in Early Help Provision, which was abandoned following recommendations from an OFSTED³ report that called for further investment in this area. The council chose to invest further in Early Help and prevention, following the OFSTED report's recommendations.

Other significant savings that were not realised include:

• £0.300 million from the acquisition of property jointly to relieve Temporary Accommodation Pressures. The council is still progressing the acquisition of properties and has a further savings target in 2025/26.
• £0.150 million from Alternate Weekly Collections & Containerisation. It is recognised that the benefits of recycling and waste minimisation will directly impact the disposal levy from 2028 onwards and as such all options to help achieve this will be considered moving forward.
• £0.360 million from the Better Living programme.
• £0.500 million from a review of social care provider services (Adults).
• £0.270 million from Targetted Reviews.

The report also provided an update on the 2025/26 savings targets, set at £10.254 million as part of the budget-setting process in February 2025. Many savings, particularly in People Services, were marked as Amber (potential issues) because they are dependent on actions during the year to fully achieve the saving. The council will look to identify alternative measures to keep within budget where savings will not be delivered, and will also report any shortfall in savings through the monitoring process.

Saving Delivery	Green (£m)	Amber (£m)	Red (£m)	Total (£m)
Resources	0.730	0.070	0.000	0.800
People	0.520	3.473	1.346	5.339
Place	0.070	0.100	0.000	0.170
Corporate	3.445	0.500	0.000	3.945
TOTAL	4.765	4.143	1.346	10.254

The Savings Progress Update report warns that failure to deliver savings will lead to an in-year overspend and create pressure to be built into the following years' Medium Term Financial Strategy (MTFS). Departments will be expected to form action plans to reduce spend and identify efficiencies to mitigate the saving if savings are identified as unachievable during the year.

The 'Red' savings targets in People Services for 2025/26 are due to several factors:

• Family Welcome Centre: The saving will be delayed to 2026/27 because the centre is scheduled to open in April 2026.
• Housing Demand: The saving will be delayed to 2026/27 because modular units are now unlikely to be onsite until Jan 2026 at the earliest.
• In-sourcing family support: This saving is likely to partly slip into 2026/27 due to delays in the implementation of this move to an in-house service. When recruitment is completed the cost to the external provider will cease.
• Transition savings (Adults): This target will be difficult to realise and achieve without securing the additional resources put forward as part of the adult social care restructure growth bid. Having additional capacity to intervene at an earlier stage pre the age of 18 would make this saving more achievable.